WSP06943

• File Number: 8220.106
• Description: Animas-La Plata
• State: CO
• Basin: San Juan/Dolores
• Water Division: 7
• Date: 7/1/1994
• Author: USDOI-OIG
• Title: Audit Report - Development Status of the Dolores and the Animas-La Plata Projects - Bureau of Reclamation
• Water Supply Pro - Doc Type: Report/Study

APPENDIX 3
Page 2 of 3

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Recommendation 2

Reevaluate the economic benefits and financial feasibility of developing the
irrigation water supply component of the Animas-La Plata Project. As part of
this reevaluation. the Bureau should eliminate the use of indirect irrigation
benefits and revise estimates of payment capacity to reflect expected
operation and maintenance costs and farm income without agricultural
subsidies.

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ResDonse

Concur. Reclamation is currently updating the entire economic
analysis for the Animas-La Plata Project. This analysis will review
irrigation payment capacity. benefits, and the project cost
allocation. The updated cost allocation will not include indirect
irrigation benefits. Estimated payment capacities will reflect
expected operation and maintenance costs and farm income without
agricultural subsidies. Presently, payment capacity studies do not
reflect income from set aside acreage on subsidized crops. The crop
rotation for both the payment capacity and the benefit studies do
not include crops that qualify for set aside acreage and such
associated agricultural subsidies.

The responsible individual is the Projects Manager. Durango Projects
Office. Reclamation's economic and financial analysis for the
Animas-La Plata Project is scheduled to be completed by September
30. 1994.

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Recommendation 3

Inform the Congress of the economic and financial viability of the Animas-La
Plata Project based on the results of the reevaluation provided for in
Recommendation 2. If warranted. the Commissioner should seek Congressional
approval for restructuring the Project to limit the size and scope of the
Project to only those water supply functions that are either economically and
financially viable or required under the terms of the Colorado Ute Indian
Rights Settlement Act.

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Response

Concur. Reclamation will communicate in writing to the appropriate
Congressional committees and offices on the results of the economic
and financial analysis. The economic and financial analysis is
scheduled for completion by September 30. 1994.

The responsible individual is the Regional Director. Upper Colorado
Region. By October 31. 1994. Reclamation will inform Congress of
the results of the analysis.

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